Review Notes - Inflation

- what is inflation?

- what is a price index?

- how can you, with actual numbers, construct a price index?

- how does a price index measure inflation?

- types of price indexes

- consumer price index (cpi)

- producer price index (ppi)

- GDP deflator

- real vs. nominal variables (the use of price indices)

- what is a nominal variable?

- what is a real variable?

- how does one use a price index to calculate real variables?

- what are the costs & benefits of inflation

- Repricing costs

- Distortion costs

- who wins from inflation?

- who loses from inflation?

- What are the types (causes) of inflation

- Demand Pull Inflation

- Cost Push Inflation

- Expectational Inflation